Chairwoman
Feinstein, Senator Bennett and members of the committee I thank you for
inviting me to testify today on behalf of the U.S. Public Interest
Research Group (U.S. PIRG). U.S. PIRG is the national advocacy office
for the federation of state PIRGs.
Our country faces many
challenges. Fueled by high profile scandals, voters in last year’s
election cited congressional corruption as a top issue of concern.
Following
the election, Congress responded to the frustration expressed by the
electorate with measures like S. 1, which included among other
provisions increased disclosure of campaign fundraising activities and
new limitations on those seeking privileged access through the purchase
of gifts and travel. Similarly, Congress has stepped up oversight of
private contractors in matters ranging from the Iraq war to ongoing
assistance to those who lost homes and businesses to Hurricane Katrina.
The
proposal before the committee today to eliminate the coordination
restrictions as written in section 441(a)(d) of the Federal Election
Campaign Act seems antithetical to those important steps. U.S. PIRG
strongly opposes the proposed change, as it will permit large numbers
of individuals to effectively circumvent the existing individual
contribution limits and invite large contributions back into the system
under the guise of hard money.
I wish to make four points
today. (1) Contribution limits matter; (2) lifting the coordination
rules between political parties and candidates would open the door to
significant increases in the contributions limits; (3) while national
political parties now collect only hard money contributions, the
proposed changes threaten to undermine the rules that make the
distinction between hard and soft money meaningful; and (4) under the
current system political parties have been able to effectively promote
their favored candidates.
Contribution limits are important to
stem both corruption and the appearance of corruption. During the
months leading up to the passage of the Bipartisan Campaign Reform Act
(BCRA), Congress spent significant time debating whether to raise the
individual contribution limits to candidates. Many Senators and reform
groups opposed raising the limits from $1,000 to $2,000 for fear that
it would allow a small group of wealthy individuals to have even
greater influence in our elections. Lifting the coordination rules
between parties and candidates would effectively raise the individual
limits for any one who could afford such a contribution from $4,600 to
$61,600 in a two year election cycle. At this level, contributions are
well above what average Americans can afford and raise questions about
whether very large donors will receive preferential access to
legislators once in office. Further, a majority of Senators surely
would have rejected this tremendous increase if it had been proposed
during the 2002 debate on BCRA.
National political parties are
now only permitted to collect hard money contributions, a significant
step in removing from parties the ability to collect unlimited
contributions. Yet, some have argued that since these contributions are
disclosed and limited, the coordination rules are less important. But
at what point are the rules defining hard money so relaxed that they
begin to lose meaning?
The coordination rules we are debating
today are not made in vacuum. They are an important part of a larger
scheme that has some checks on the ability of very large donors to
dominate our elections and gain unfair advantage in the political
process. Loosening or lifting the coordination rules opens the door to
an unlimited number of very large contributions that could easily be
routed back to a favored candidate with no meaningful distinction
between money sent to the party or to the candidate directly.
Under
the current rules, political parties are able to spend unlimited sums
in support of their candidates as long as it is not coordinated with
the candidates. In Federal Election Commission v. Colorado Republican
Federal Campaign Committee, the courts upheld the parties’ right to
make unlimited independent expenditures. The Court also recognized the
important distinction between coordinated and uncoordinated spending.
The court upheld the coordination restrictions because it concluded
that coordinated spending was tantamount to a direct contribution to
the candidate and circumvented the contribution limits.
According
to a March 7th statement from the Federal Election Commission,
Republican national, state and local committees raised $602 million and
the Democratic counterparts raised $483 million in the 2006 election
cycle Democratic Party receipts were more than double those in 2002 –
the last midterm election. Republican Party committees raised 42% more
than in 2002.
Given the experience of this last election
cycle, it seems a misplaced concern to worry about the impact and
viability of political parties. By all measures, parties are enjoying a
resurgence with an influx of new members, smaller donors and increasing
resources. These are the signs of a healthy political foundation.
Candidates are not marginalized from their parties. In fact, under the
current rules, parties can coordinate their spending with senate
candidates in varying degrees depending upon the size of the state.
The range this year is $81,800 in smaller states such as Alaska and
Wyoming to more than $2.2 million in California.
In closing, I
would note that individuals can give to candidates directly, a
candidate’s leadership PAC, other PACs, national party committees and
state and local party committees. Parties also can give directly to
candidates. Collectively, a single individual could direct virtually
unlimited sums of money to a particular candidate if not for two
important restrictions. The first is the aggregate limit on political
contributions, this year a little more than $108,000 for the election
cycle. The second is the coordination rules for parties and
candidates.
Given the high profile scandals and the growing
concern over money and politics among members of the public, now is not
the time to roll back these rules.
The question before the
committee today is whether to further amplify the voices and potential
access of the few by creating a new, legal loophole to circumvent
campaign contribution limits. These limits have been debated
extensively, approved by Congress and affirmed by the courts as a
legitimate defense against corruption and the appearance of corruption.
With
heightened awareness and concern among the American people regarding
the role of money in politics, this proposed change is both ill-timed
and destructive to the framework around which Congress built campaign
finance rules over the last 30 years.
